While China and other Asian nations are heavy consumers of satellite VoIP services, Frost analyst Chris Brown said he was surprised to find the biggest market is in the Western hemisphere.

"It looks like the biggest market for VoIP over satellite is Latin America," he told Wireless NewsFactor. "For this report, we looked at international voice traffic. We looked at how fast voice over IP was growing in regions where international traffic was growing fastest."

It is not hard to see why Latin America topped the bill, Brown said.

"If you look at fiber maps, it's the most underserved area," he said. Still, Latin America has no lock on being underserved. China is the biggest potential market in Asia, Brown said, and all developing regions share one problem: "With all regions, fiber stops at the coast. They have to bring service inland somehow."

Enter the satellite VoIP provider, with services much cheaper than the cost of laying fiber. "One satellite company told me it can cost $10,000 per kilometer to lay fiber, and that's not even to light it up," Brown said.

VSAT: Where It's At

Regardless of region or the needs of developing nations, the cost-effectiveness of VoIP over very small aperture terminal (VSAT) technology will appeal to everyone, Brown predicted.

"It's cheap to put on a VSAT network. The quality may not be excellent, but it's a cheap way to enable internal corporate communications ," Brown said.

VSAT networks are often visible as small satellite dishes on top of banks, gas stations and other businesses, Brown said. Companies that have a lot of remote locations and that need to exchange data with one or more hub offices find VSAT an inexpensive way to accomplish this task as they put together more robust networks for other aspects of their businesses.

"For around $500 per VSAT, a user can add voice capability to their network," Brown said. "Depending on the amount of interoffice calls, integrating voice into an existing data network can pay for itself in the first year. It's cheap enough that a lot of people say, go ahead, throw that in, too."

Talking on the Web

VSAT technology also enables companies to put a voice component onto their Web sites, Brown said. Users with sound cards and microphones would be able to talk to live customer service representatives while ordering merchandise.

"Mainly, it's the market for e-commerce over the Internet," Brown said. "People want customer service over the Internet, they miss that human part of it."

Brown said all of these factors will combine to make satellite VoIP huge. Looking beyond the 2007 time frame of the report, he said bigger things lie in store for the technology.

"It looks like international long distance will become all voice over IP by 2010, if it keeps going the way it's going," he said.